Cyberfuels Holding Company Inc (CBRF)

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In China, methanol is widely used for direct blending into gasoline, synthetic gasoline production from methanol and the blending of methanol derivative dimethyl ether into LPG.

This link is seen likely to increase further in 2015 due to new methanol-to-olefins and methanol-to-polyolefins complexes, known as MTO and MTP plants, coming on stream that will pull methanol even further into the energy mix.

Industry estimates see demand for methanol from MTO and MTP plants surging ... to 9 million-12 million mt by end 2015.

In addition, ethylene and polyethylene production from methanol is also rising sharply; China's ethylene capacity will surge 2.7 million mt/year to 3.5 million mt/year in 2015 and polyethylene capacity by 2.4 million mt/year to 3.2 million mt/year.

The question for 2015 is where to source the additional methanol required by the MTO and MTP plants.

It could potentially come from domestic methanol plants in China ramping up production, or from demand destruction from other downstream end-users such as DME and synthetic gasoline makers who would be pushed out of the market if methanol prices were to rise too fast.